Friday Open Thread
Posted by Stuart Staniford on December 23, 2005 - 6:32pm
Topic: Miscellaneous
Tags: hubbert peak, oil prices, peak oil [list all tags]
Enjoy...
Posted by Stuart Staniford on December 23, 2005 - 6:32pm
Topic: Miscellaneous
Tags: hubbert peak, oil prices, peak oil [list all tags]
Driving home from the grocery store tonight, I passed a house on a hill that was decked out in holiday splendor. Trees and shrubs were covered with colored lights in all sorts of 'festive' shapes and Christmas themes. It reminded me of when I was young my parents would drive us around town to look at who had the best 'christmas lights' in town. It was actually usually the local fire station.
Alas. 18 months after learning about Peak Oil and continually exploring it since, my immediate thoughts on viewing this brightly bulbed house were along the lines of: non-sustainability, kilo-watts, what kind of fossil fuels were being used to generate the electricity, how much energy went into creation of the wires, etc.
For me, as hopeful as I am for the 'silver BBs' that we will collectively find to ward off societal twilight in the next generation, I feel my childhood ended last year (I am 39) when I started reading dieoff.org and other Peak Oil sites. I still very much enjoy life and all pursuits human, but I now view things that normal people take for granted, in a much broader, more critical light. I cant help but think in terms of sustainability and energy now when I look at everday things.
Yes, sometimes ignorance can be strength. Happy Holidays everyone.
Well put.
Once you become PO-aware, nothing is the same any more.
You have spotted your first "bug" in the system.
BTW, if you have not seen "The Island", it's out on video. Not an Oscar winner, but very interesting from a PO-aware point of view. It shows how a small piece of information can change your entire view of the world.
Holding your sweet child's hand and telling him it will be ok, while the smiling nurse injects them with a huge dose of mercury and a multiple vaccination that will cause years of misery.
Realizing that most doctors are just the distribution arm of large pharmaceuticals.
Finding out that your government does not work anything like what you were taught, and seeing an election stolen, your government hijacked, and the nation torn apart.
Finding out your news media has become Pravda, only it's worse because so many people don't know it.
Learning that so many of the myths we learned about our history are utter crap, lacking even a shred of truth.
Understanding the damage being done to the environment, and feeling powerless to do anything.
Yes, it's made me a cynical bastard, but there is good too. While it is sad that we cannot just believe what we are told, I have accepted that I must do my own analysis, and make my own decisions - it's a different way of thinking, but rewarding in it's own right. There is satisfaction in gathering knowledge and making good decisions. The concerns over what the future will bring weigh heavily on my wife and I, but there is still the love of our children, and the knowledge that I have a very capable partner and we'll deal with whatever comes together - it will not be the first challenge we've faced.
So enjoy the holidays, try to focus on the simpler pleasures, and don't mourn the passing of traditions that don't matter anymore. And if it makes you feel any better, those Christmas lights don't really use that much power!
Back in August I penned this for a young american friend of mine, thought it might be enjoyed by some here.
<BOLD>Who killed the 'American Dream'?</BOLD>
Back when there were about half as many humans, before Intel made the first integrated chip (1974), when mainframe computers about as powerful as modern wristwatches were just becoming available costing $ millions and were the size of rooms, I read a book. "Limits to Growth" was written by a handful of academics who wanted to try out these new computers for modelling and forecasting something. Nowadays they'd probably try it on stocks and shares, then they modelled the future of the human race and its interaction with this planet. Some people walked around with their eyes open in those days and were brave enough to look at meaningful things.
The computers were slow, the models simple, the results probably mostly inaccurate, but it was the first time people had systematically considered human and economic growth and when it would run into the natural limits of this planet to support them. There was no simple answer but the one I remembered was: things start to run out around 2016 give or take a few years. More than 40 years away, plenty of time for us smart humans to fix things. Ah, the optimism of youth.
About four years ago I was seeing mention of 'peak oil' and began looking into it. Realistic estimates (from ASPO) then were that it would happen about 2012, still over 10 years away but starting to get close - time for me to begin thinking of what I should be doing, and where, when peak oil hit. Well, in these last 4 years I've watched with growing concern as that estimate has moved to 2010, 2008, 2007 - the estimated date for peak oil and the present date have been rushing together at similar speed. Like two galaxies colliding the first impacts have already happened and their ripples have begun to distort and rip our reality, though few have noticed yet.
Peak oil brings the end of the 'American Dream', the US economic and financial systems have minimal chance of surviving it, the next 10 years will bring at best the halving of wealth of the american people, or halving US population, or maybe both, or maybe worse.
In the latter half of the 1970s the american people elected a truly honest president, it coincided with the last energy crisis. He set out what the USA must do to become virtually independent of foreign energy supplies. It never happened, he wasn't re-elected.
Had the american people, congress and senate supported Carter and implemented the energy policy that he spelled out very clearly the world would be very different today and peak oil would be at least a decade farther away. We would have time to change further and the US would already be at least half way on that positive road. But, as Carter said "There is no way to avoid sacrifice...". That didn't sound nice so the american people turned their back on truth, embraced illusion, and postponed the (then small) sacrifice. Thus was humanity and this planet betrayed.
There are a number of answers to my question but I am thinking of two specific ones: an individual, and a group of people. No conspiracy, both obvious and inter-related.
Is there any possible way that supply can meet demand in North America ever again?
I have had feeling about this ever sense I started investigating LNG. Now after reading this weeks Wall Street article, my outlook even looks more grim. LNG now costs $2-3 above the Henry Hub....and the USA can't get enough to make a dent! How high must it get before we can import enough to even make it worthwhile? How much natural gas will be used to extract the harder to reach oil? Will exporting countries keep their LNG for future use? Is increasing LNG supplies a myth?
It appears to me peak oil will be a vicious downward spiral. The market will save us! Well the market has never had to deal with this. The market has never dealt with population decline and has always had another energy source to take advantage of. Capitalism is nothing but a pyramid scheme that only works when unlimited supply is available and more people are added to the bottom year after year. Both pillars of the capitalist model will start disappearing in a matter of years, whether this year(Japan? Europe?) or in 25 years, the pyramid will collapse before we even know what happened.
The market says LNG will "carry us to another source" "bridge the gap". What if LNG is a boondoggle that never pans out?
I think this the biggest question mark in our energy situation over the next 5 years.
I've described some Japanese techniques for conserving natural gas here.
It's really not a big deal. I know Americans who have reduced their NG consumption to 15% of what it once was with negligible effects on their lifestyle.
Seriously though, there are some very simple principles that govern heat conservation:
1. It's cheaper to heat a smaller volume than a larger volume. So just heat one room, or better still, part of one with dividers. Better still, wear warm clothing in the house. And of course thick blankets or even an electric blanket is good if you're old and don't generate as much heat as before. Central heating is terrible when avoidable. So is central air, but it's winter---off topic.
2. Heat used equals temperature times time. It's cheaper to heat just when needed. Turn heat down or off when not needed. Hot water should be heated on demand.
3. Heat rises. A ceiling fan can mix it up and bring some of it back down.
4. Heat convects, i.e. leaks where air leaks. Plug where it leaks. Use incense smoke to detect air currents. Don't overdo plugging in a really small space, however, until you overcome your oxygen addiction.
5. Heat is at the end of the energy chain, i.e. most other forms of energy degrade to heat. So: almost all of the energy from an electric heater turns into heat---there's no efficiency issue. So: incandescent bulbs are ok in a room you want to warm up---but otherwise they are a big waste.
6. Heat radiates. I'm not sure how much goes out the window. Properly colored drapes and that kind of thing might be important. Help.
I live in a condo with 69 units. We are just beginning the struggle around all these issues! This is the winter everyone will realize there is a BIG issue---when we get the bills.
In the long term, you are probably going to want to get really serious with insulation everywhere.
It sounds exactly what I have been looking for?
Rick
He also mentioned the falling resources in Indonesia.
Not pointed specifically at Indonesia but I wonder what the typical despot will choose, Big $$ from OECD in his pocket or food for his slaves/people?
In the larger picture I think there's still lots of gas out there but in the short run, Limited processing, Very limited Cargo Capacity and limited port locations (aka nimby). The few shipyards that build LNG shipping are booked up with orders for dedicated route ships.
Question I have is, with 100% gulf production recovery will we have enough gas next winter? In a more worse case what if we have another damaging hurricane?
If you add up all the countries that are planning on using LNG in the next few years, you wonder where the supply and/or investments-pipelines-ships-terminals will come from.
USA
Canada (for tar sands...yuk)
Mexico
Chile
Indonesia
China
New Zealand
Spain
Italy
England
Japan? (Not sure if they need more or not)
That is at least 10 countries that are building new terminals and/or expect an increase in gas to their country over the next few years.
And if any of this gas is used for electricity production, you can expect only a 30% Energy Return.
Just doesn't make sense to me. Somebody is going to get screwed in this whole deal. And most likely rate-payers.
Flavius Aetius
(to other posts)
2 There will not be a US ng shortage for several years. The hidden hand is already booting the chemical industry, or that bit that makes feedstocks from ng, overseas to where ng is cheaper, taking jobs and tax base with them. High prices are also persuading most, certainly including the poor but also much of the middle class, to reduce consumption. Current stocks in storage do not justify today's high prices, and traders doing the math are accordingly taking prices down. However, in 2015, when US ng production may fall off a cliff, we will hopefully have elbowed our way to the front for ng imports (we expect and deserve the lion's share), or have built sufficient coal (ugh) or nuke power plants such that electrons will continue to obey our commands. The difference between Britain and the US is that Britain is facing this question in 2005, with zero lead time. We have a great seat to watch what will be our own preview if we squander tne next decade as we have the past three.
3 Carter was prescient on energy, which he saw as his great test - most presidents have a couple. BUt, he failed to seize the nettle and cut off Iran's oil exports in response to the hostage crisis, which would have caused a brief spike in oil but would have quickly brought the hostages home. Judged a failure in what the US public thought the greater crisis, he was cast aside. The Iranian nettle is back - we will soon see if Sharon repeats Israel's past efforts at vetoing nuclear weapons from competitors.
4 Are people aware that, early in Clinton's administration, when Democrats had a majority in at least one house, a carbon tax was proposed, but that environmentalists did not support it because it seemed to favor nukes? Naturally, with no major group behind it, the CO2 supporters had easy work. It has always been true that people are either pro-coal/anti-nuke or anti-coal/pro-nuke. This will become more apparent as we go forward (or backward) into the future.
5 McMansions are mostly new, and many are extremely well insulated, using the latest materials and techniques. They might not use much more than that consumed by smaller, older homes. The main thing is that the poor and middle class luckily far outnumber the rich, so as a proportion of gdp the latter don't matter much.
Happy holidays.
Someone told me Economides predicted $20 by X-mas. We can put that in the wrong column, Agric. But I didn't here him say it, maybe someone can verify.
Put me down for $20 by next Christmas, though. And It would be interesting to see how many people, at least on The Oil Drum, would bet against that outcome.
Oh, wait...
In my understanding, in market based pricing, a falling supply will cause prices to rise. The rising prices will either cause suppliers to come up with any additional supply they can find, or more likely will cause consumers to cut back. Consumers are already cutting back. Industrial consumers are shutting down and leaving for places with cheaper supplies. Consumers can cut back a lot more than people think, though again, they will probably start screaming about the pain. At what point does the public pain cause the politicians to switch to rationing? Or, from the other side, at what point do so many producers nationalize production that the only way to get supplies to market is to go to war for them?
I think inflation, dollar devaluation, and recession are more likely responses than capitalism failing. Market pricing is much older than the oil age. Of course, if there's enough inflation and recession, we'll start reconsidering capitalism again, as we did in the depression. People are even less willing to accept severe changes in the labor market than they are in the energy market. As many have pointed out, large changes in the energy market will most likely result in large changes in the labor market at some point.
Why is the US being outbid.....
From the Wall Street Journal article
So yes the long term prices are not that bad, but any increase supply is well above the spot prices. And the only way to bring down prices is to......increase supply!. So either way we will pay high prices.
But there is no guarantee that supply and demand meets at a price where people are comfortable or even surviving.
Please do not mix theories about how markets work with naive almost religious ideas about markets allways providing comfortable lives for almost everybody.
A technically well functioning market is most of the time the most efficient way known to get limited resources to where they are most usefull and thus to get resources invested where they can grow.
This is most often very good in both good and bad times. I think abandoning market principles and laws supporting working markets, especially physical markets would be a terrible mistake during times when companies need to go bankrupt fast to free resources and other companies and other infrastructure need too be built fast.
The larger percentage of people that can be fed and find a future however poor in a working market economy the easier it probably is for the state to keep the rest alive in hope of them finding a future.
It is my hope that any economic repercussions from the future energy situation will not happen too soon so that those of us that are making efforts to prepare have time.
Until I see any major heads of state address the issue point blank, I have little hope that the developed countries economic stability can be guarantee when the squeeze comes.
Re peak oil, just learned in May, hoping no crash soon, to much to do. Thanks for this site, It is helping as many don't want to discuss this or fell the need to.
It would seem to be a mix of probability and economics.
Understandably, bigger fields are easier to find. If you cant find em you cant produce em (see north sea for example)
However, much more important is that bigger fields generally provide much bigger returns. All other things being equal, a hole in the ground is a hole in the ground, and will cost a certain investment in order to dig it. A larger field will pay a return on that investment for a longer time period. Also, larger fields can bear a greater number of wells (for the same fixed infrastructure investment), and therefore a greater return on investment can be earned faster.
Lastly, the main infrastructure that makes a certain field viable may only be worth implementing in the context of the larger field. To clarify, a small field in the middle of nowhere may not be worth drilling, because the costs required to get that oil to market would be too great. However, if a big field shows up next door, that may justify building a set of infrastructure to move that oil (pipelines, roads, etc.). Now that the nearby infrastructure is in place, it may be worth drilling the small non-viable field mentioned earlier.
The solution to our energy problem is not to take someone else's oil.
We're all in the same boat, so instead of trying to beggar each other, let's start bailing and repair the boat. There is no other choice!
God help us all!
For a little example, during the holidays I have had to move my office out into the shop to make way for all the relatives, and being lazy, I simply put on more clothes rather than starting the stove. Behold! I am very comfy sitting here in my layers of fuzzy clothes in a cool shop! 10C is no problem.
And of course the Inuit would laugh at me. Or my Scots cousins, who never got around to central heat in the first place.
And I have finally convinced my family that $ gifts are not to be given, except from us old geezers to young folks in some sort of actual need. That made us all a lot happier and richer to boot.
And what could be more wasteful than the private car as the ONLY way to get around! People like me shouldn"t even be allowed to drive, much less, have no choice.
Add your own favorite example of waste here.
My best idea for energy saving was at work. I went and took out half the overhead lights in the room I work. My boss objected at first, but forgot about it, so the energy saving continues.
One day you will wake up with your sweater and ride your bike to your office and it will seem kind of like a typical day to you, because your neural grooves will have become conditioned to those` behaviors -but all around there will be other people in sweaters on bikes that will not be pleased...Keep it up - we have genetic algorithms that work on 'relative' vs 'absolute'. I expect some % of the PO community has gravitated here just for that. But someday theyll be right.